European tech exits see bright start to 2015

17 Apr 2015

According to a new report by Tech.eu, Europe continues to make confident progress in the exits market. Emerging technology hubs across the continent are creating talented individuals and innovative start-ups, which are being snapped by eager investors and companies through dynamic business transfer agents in the region.

In the first quarter of 2015, Tech.eu tracked a total of 140 exits (acquisitions, IPOs and/or mergers), a rather whopping 61% rise in the total number of deals compared to Q4 2014. It gets even more impressive when you compare the number of European tech exits in the first quarter of the year to Q1 2014, when there were only 54 M&A transactions and IPOs in total. That means the year-over-year increase in the number of deals is roughly 160%. There’s clearly more appetite for mergers and acquisitions of European technology companies. The maturation of the EU-wide technology industry is now even more measurable and quantifiable than before.

It should be a surprise to no one that the major consolidation wave in the British telecommunications space has generated the two biggest deals in the first quarter of the year: BT coughed up £12.5 billion for EE, while Spain’s Telefonica finalised a deal to sell O2 to Li Ka-shing’s Hutchison Whampoa for £10.25 billion.

Another huge deal was TE Connectivity, a Switzerland-headquartered designer and manufacturer of connectivity and sensor solutions, which sold its Telecom, Enterprise and Wireless businesses to CommScope in an all-cash transaction valued at approximately $3 billion in January. Then there was Optimal Payments, which agreed to acquire digital payment service Skrill Group in a cash-and-share deal that values the business at 1.1 billion euros at the end of March.

The two IPOs tracked last quarter – Finnish provider of mobile consumer loans Ferratum and Italy’s e-commerce giant Banzai – also made the list. Rocket Internet paid €496 million for a 30% stake in takeaway food ordering company Delivery Hero, which was considered a significant enough acquisition to be listed as a purchase rather than a funding round.

Germany was the leader in terms of number of tech exits, by a margin, with 30 transactions monitored. There were 16 deals in the UK, 14 in Spain and 13 in Israel. This is followed by France and, surprisingly, Switzerland with 9 exits each. In total, there were acquisitions or mergers of technology companies in 24 countries.

US buyers made up the dominant majority in deals as usual, with 37 out of 137 deals involving an American company as the acquirer. But, last quarter, Germany was almost on par with 34 mergers with or acquisitions of European technology companies. Active buyers were also to be found in the UK (10 deals) and France (9 deals). The most active buyers were Rocket Internet (4 deals), ProSiebenSat.1 (3) and Intel (3).

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